Beneficiary Designations
I have come across an unusual situation. While at a 401(k) enrollment meeting I was asked by one of the 401(k) plan participants how he should list his beneficiaries. He is from Mexico working in the U.S. legally. His wife and children still live in Mexico and they do not have SS#’s.
Does anyone know:
1. Does he have to list his spouse as the primary beneficiary since she is not a U.S. Citizen and has no ss#?
2. If he does list his spouse and children as primary and secondary beneficiaries is there a special identification number that they have to apply for?
Any thoughts are appreciated.
Permalink Submitted by Denise Appleby on Thu, 2008-05-22 00:35
Kevin,
The spouse will still need to be the beneficiary, unless she consents to having someone else named as the beneficiary. Her consenting may be a challenge, as her consent needs to be properly notarized or witnessed by a plan representative…but that’s just an aside.
The plan may (should) be able to waive the TIN requirement for the beneficiary designation. If not, or in the meantime, beneficiaries who do not qualify for SS#s can apply for ITINs.
At a minimum, I would have him submit the beneficiary designation without the ITINs and indicated ‘applied for’ in the fields where the TINs should be inputted. You want to have something on file, just in case
Information on ITIN here http://www.irs.gov/individuals/article/0,,id=96287,00.html
Denise
Permalink Submitted by James Lavorgna JD LLM CFP on Fri, 2008-05-23 13:15
Hi Kevin
The plan participant can set up a grantor trust and make it the beneficiary of the retirement plan. He can then make his spouse and child the beneficiary of the trust. There is no requirement to require a Social Security number for nonresident aliens (NRA). However, as many do, the NRA can apply for a tax identification number (not a SS#) from the IRS as many IRA’s do.